Online business is all about action; let’s skip the fluffy intro and get right into it …
Why do you want to start an online business?
Before you begin kicking up ideas for your grand, online empire let’s think of this question for a moment because it’s important to understand the why before you work on the how.
The following is the general idea of why people want to start an online business:
- Make money online so they can leave their 9-to-5 job
- Be able to travel the world with just a laptop
- Make incredible income because of this whole “online thing”
All of these are fine and dandy but they only address the end goals; thinking only along these terms make us forget that there is actual work involved to accomplish these goals. It’s easy to get consumed by these ideas because it gives us warm feeling to think that we’ll have them one day but when it comes time to get into the nitty-gritty – we start to slip up.
Rather than painting you a picture of working on the beach, traveling, leaving your work and these stupid ‘push button’ systems; I want to make you question why you want to start a business.
There are bigger questions that should be on your mind:
- What’s the best platform at my disposal to reach my target audience?
- Who is the type of person that will buy the products I have to offer?
- How do I build a business that works for me and doesn’t create another job
- What can I do to deliver the most amount of value to my end user
There are thousands of scams that you’ll run into when you start. You often get fooled into believing that it’s as simple as flipping on a switch, pressing a button or installing a piece of software. You get bombarded from individuals that share their success which, in some cases, are just smoke and mirrors. After all, everyone can make money online right?
Here’s the thing though: Not everyone is going to create a successful business on their first go.
What I’d like to teach you, over the course of this series, is that it’s better to understand the process of building a business rather than trying to replicate success from others.
It’s important to build systems which can be applied to your ventures based on past experiences rather than buying into the latest, hyped product launch. It’s important to learn how to develop and idea that’s profitable only after research rather than starting and stopping just because you read something thrilling online.
This leads us to the first step of starting a businesss…
How to Develop a Profitable Idea for your Online Business
You probably have thousands of great ideas for your online business. Maybe you have existing skills that you’d like to take online as a freelance service? Maybe you have a wealth of information locked away in that noggin’ of yours that could become an amazing information product. Hold up.
The problem with the web is as follows:
- Every idea has a viable opportunity to make you money online.
- An idea doesn’t necessarily mean things will come to launch or be profitable.
Yes, the platforms that we have been given through the web lets us connect with markets that are ready to buy what we have to offer but this will never come to light because there is still a great deal of work and research that needs to be done so we can actually create an offer and align to the correct type of people that want to buy.
The task of head of you is to not just develop an idea that looks good on paper but is one that people can get behind and exchange value (aka. Buy from you).
The good thing is that you have multiple tools at your disposal:
- An existing community which you may tap into if you’re a website owner
- Free tools to research markets online such as one’s provided by Google
- Social networks to research problems that users are facing and to gain valuable feedback
The goal is not to take a shot in the dark but to make a calculated and logical decision on whether your idea is viable in nature.
5 Methods to Develop a Profitable Online Business Idea
When you work through this section, remember two things:
- Will someone buy what I have to offer?
- Is this just a “project” or an actual “business”
You can have thousands of ideas, as I’ve said, but it doesn’t necessarily mean they’re the best option for you at this junction of starting an online business. Equally so, you want to make sure you understand that there is a monumental difference between treating your idea as a project and a business. Answer both of these as you work through the following examples:
Method 1: Use what you know
The easiest way to develop an idea for your own online business is to examine what knowledge you currently posses. Each of us has at least one skill that may be viable as a business venture.
If we can find others that need our skills than we have opened up the opportunity to offer freelance services, information products, coaching and more.
More importantly, since we already have this knowledge we can easily transform it from memory and experience into actual products or services to offer to potential clients or customers.
For example, you could start an information-based business based on:
- Your skills in video production or other high-end, in-demand services
- Your knowledge of sales and marketing
- Your experience with tools, software or platforms
- Your past education such as what you’ve learned in college
- Your work experience form your current (or existing) job
Action: Write down all of your best skills, past job experiences, personal projects and feedback you’ve received from others. Assess each of these ideas and look at the past response you’ve received from people. Figure up how much you’ve spent to learn these skills, how much time you can save people and expand your list into concrete examples of your best work.
Method 2: Examine your hobbies or interests
Hobbies can be a great source of inspiration for your online business goals. A hobby or interest that you have, in many ways, will give you the best viable option when starting out because you already have the passion, knowledge and need to connect with others that share this same interest.
Hobbies can range from any number of interests, such as:
- Scrapbooking
- Hiking
- Fixing computers
- Creating music
- On and on and on
The web is so large that no matter how small your interest … there’s others out there that have it as well. Your only mission, at this point, is to figure out the inherent need within this hobby market because that will give you an idea on what product or service you could offer.
Remember though: If you treat your business like a hobby, you will only make hobby money. You have to think of it as a real business that just so happens to be something you already, thoroughly enjoy.
Action: Write down each of your hobbies or things that you’re incredibly interested in. Be realistic with yourself; ask whether you truly understand and love the hobby or only have a mild interest in doing it. Think of your own slant into how you can help others get introduced to the hobby or teach an advanced element that people are having trouble overcoming – boom, you’ve got your business idea.
Method 3: Look at what others are doing in your market
There are millions of businesses that simply do what others have already created (dentists, tax services, car repair, etc). It’s often less about having a unique idea as it is about just getting started with something.
You don’t have to reinvent the wheel at this point because you can use the thought of what’s working now to help give you a clear path for your online business.
I’m not telling you to go out and rip-off what others have done; I want to make that clear. What I AM telling you is to use the existing resources, at your disposal, to gain inspiration and spark an idea for your business – which happens to come from what others are already doing in your market.
Using inspiration from others work does the following for your business idea:
- You already know there are buyers in the market
- You already know people are making money from it
The job YOU have to do is to figure out how to take those bits of inspiration and make them your own. You’re an expert at something; it could be in the same field as others. Look at what others do to earn their online income and figure out unique ways to present your knowledge as a form of a product or service.
Action: Browse through all of your favorite blogs and quell up past conversations you’ve had with people in your network. Look back through comments, left on other blogs, to see if there glaringly obvious questions that have yet to be address as a whole. Look at what works for others and ask yourself whether you have enough knowledge to teach something similar or that’s niched inside the same topic. Collect all of these ideas and figure out which one would work best for you by taking into account your own abilities, knowledge and existing platform (such as your blog or social network).
Method 4: Use feedback from your community
The easiest route, hands down, to develop a profitable business idea is to collect and examine the feedback you have been given by your community.
The feedback you receive will tell you, to your face, what products people are interested in buying or services they’d subscribe to.
Instead of making a guess or playing on what you’ve researched – you’re being told what people are ready to buy. Additionally, you’ll know what problems people have so you can easily create a product or service to solve these elements.
Feedback is incredibly simple to collect and can be further exemplified with the following tools:
- Online Analytics to view search habits of your visitors
- Surveys and questionnaires that can be placed on your site
- Directly asking your community through email, Skype or on social networks
- Browsing websites, forums and networks where people talk about their hurdles
- Using blog comments, yours and others, that share common problems in the community
- Leveraging paid advertising to see if people are ready to buy
The list can, literally, go on and on; it’s one of the best uses for the web in business because you can gain immediate feedback from your community rather than paying a team of experts to research for you (commonly used in traditional businesses). In all, all of the information you need to create a product or service is right under your nose; collect all of this information and see if you could create something from it.
Action: Create a post that asks your readers if they would be willing to participate in a survey in which you ask them, directly, what type of problems they have and products they’d be willing to buy. Tap into your email list (from an autoresponder or through digging through your comments) to directly email those that fit your ideal customer and then gain feedback. Lurk around on other websites, not just directly in your niche, to see the most common problems that people have. Jot down all of your notes and make a real assessment on whether you have the knowledge and experience to create a product people are willing to pay for. It is also beneficial to have text analytics software in order to maintain customer satisfaction.
Method 5: Focus on a single topic you love
Perhaps one of the easiest ways to develop an online business idea is to look back through your blog, website or previous chats to see what you’re most comfortable talking about. You may find dozens of content pieces that are on a single topic such as web skills, doing a hobby, completing a task or participating in an activity. Each item will be specific to what you enjoy talking about.
If you love what you do; you’re not going to have trouble doing it over and over again.
For example: I thoroughly enjoy talking to others about freelance writing and content marketing. I decided that because I know these topics and enjoy doing them that I would easily be able to stay focused on them.
Confidence in a topic is extremely important. Your customers will pick up on subtle stutters and uncomforting speech when you offer your product or service – especially if you know every little about what you have to offer.
Action: Figure out and write down the items you absolutely love talking about to others. Ask yourself whether it’s something you see yourself working on for years on end. Remember, what you like today may not be something you enjoy doing months down the line.
How to Research the Profitability of your Business Idea
One of the parting words my boss gave me when I left my job was “if you think of your business as a hobby than you’re only going to make a hobby’s wage”.
There will be a lot of research that you’ll need to do in this series but the most important is at the idea generation phase.
Failing to figure out if your idea is profitable may lead you to developing a business that goes nowhere; you can have a great idea and create products or services around it but if it’s not something that people are willing to buy than you’ve just wasted a lot of time and resources.
Three questions to ask before doing research
Before spending time doing the actual research; answer these questions as sort of a “first run” test on the overall profitability of your business idea:
- “Do I have a Buyer’s Market?” – Lurk around the web in niche communities (and your own site) to see whether people express that they are willing to buy. Don’t assume that people will pay for information just because they have a need for it. Look at what already sells on other websites and see if the types of products you’ve found align with the ideas you’ve generated.
- “What are People Willing to Pay?” – There’s no reason to guess what your product or service is worth because it will ultimately be what your customers are willing to pay. Sure, you can try to increase the value by claiming your information is extremely valuable based on time and resources invested (for both you and your customer) but that doesn’t mean that the price you’re thinking is the one people are ready to pay. Get to understand what people are currently paying for comparable products and then make a smart decision for your own.
- “Is my Market in Growth?” – Your ideas may be sound today but could be utterly worthless tomorrow. Make sure that the knowledge you have, today, is evergreen; information people will always need in the future. Trying to go after trends may give you a flurry of quick sales but it doesn’t leave you with much once the hyped dies down and people move on. Figure this out by looking back at the spending habits of your market and then compare your knowledge to how far it will be viable in the future.
These are three questions I’d like for you to answer before you move forward with your business ideas. Of course, there are many more that will specifically apply to the type of idea you have but the main thing to remember is that you need to find whether or not people are already buying and are willing to buy.
After you’ve did this initial test of your idea; you’ll need to now do the research into whether or not it’s viable. This step, overall, isn’t entirely difficult because there are many tools available online but it may take some time to get a clear picture.
Five actionable ways to research the profitability of your idea
Once your idea passes the basic ‘litmus’ test; you’ll now have a clear idea on what to look for when using the following to do further research into your business idea:
- Browse existing platforms – Take a look through existing platforms to see if people are talking about what they have bought online (WarriorForums, DigitalPoint, etc). If people already buy what you have in mind than you’ll have a firm understanding that your business idea could be extremely viable.
- Ask your community – Remember how you asked your community for an idea for your business idea? Well, go back to them and ask whether they’d be willing to buy a product or service based on that idea you’ve generated from the initial feedback – simple!
- Piggybacking – Join up with email lists from other online marketers to see what type of products they are promoting. Chances are, if they’re promoting a product than they have previously done the research into whether or not their market (which could be yours) is willing to buy.
- Keyword research tools – Learn the exact search terms people are using to find information, products or services related to what you had in mind for your business idea. If there is a ridiculously low number in the results than it may mean that either people don’t really care for what you have to offer or it may be just starting to pick up interest.
- Run a short “dry” launch – Skip the tedious amounts of research by putting a product out there even if it isn’t finished. See how many people click through your offer and get to the sales page (even the checkout page). Shut down the sale before anything is completed to avoid hassles. You’ll learn that people are ready and eager to buy – viola!
The reason why you’re doing all of this work now is to help you avoid wasting your time and resources at a later point. You could spend thousands of hours developing your business only to find out that the original idea wasn’t very profitable. Do your leg-work up front and the rest will be easy.
Start an Online Business Week #1: Action Items
As promised, I wanted to include a set of action items to help you move forward with each step of the process in this series. Consider this section “homework”. I want you to make a real effort in doing these items especially this one because it’s the first action that will put you on the path to your success.
- Item #1: Create a folder on your desktop that reads “My Online Business”
- Item #2: Use a pen & paper, whiteboard, mind mapping tool, spreadsheet, whatever and begin copying down EVERY idea you have about a potential online business. Use each of the examples in this post to help you generate your online business ideas; don’t omit anything even if it’s outlandish because it could be used as influence for a larger decision.
- Item #3: Go through the steps to assess whether your idea is profitable in nature. Compare your idea to whether it’s a “project” or an actual “business venture”. Look around in social networks, poll your community, ask your online network friends or present it to business owners you respect. Take every bit of feedback and criticism and put it down on paper. Ask yourself whether or not you can comfortably work through your idea; if you’re ready to start the long process of building a business and whether you want to continue doing the idea for years on end.
Don’t skip out on doing these actions. They’re the most important out of any other step within this series because it lays the foundation for everything that you do.
Conclusion & Final Thoughts
So here we are: The end of the first post; developing a profitable online business idea. I hope this post has given you insight on the first step of starting an online business but it’s going to require work on your end to make things come into play.
What I’d like for you to do now is to get started with these action items. Come back and leave a comment sharing your idea so that the community, here on Murlu, can give you valuable feedback. I want you all to be relentless in your initial research. Let people know about your plans because they’ll help you stay focused. Get to it.
Have you ever talked about how you organize or outline these epic posts? I don’t believe in push button business either but what do you think about senukex? Seems spammy and maybe goes against your niche ethics but a review would be appreciated.
Great post. Following closely!
Hey Bo,
I may have to do something on writing these posts sometime; maybe it can be a free report for the subscribers here or consider doing some kind of micro sale
In fact, I did have an ebook in the works a while back that covered this. Hrm, I may have to dig up those plans again because I had a lot of it completed but never got around to finally packaging it.
As for SENukeX, I see the benefits of it but it’s not something I would probably use just because I want to focus on killer content above all else. I know this may hurt me in the long run but my aim is to build an authority niche site naturally because it lets me further understand where to take it rather than going for those spikes.
I may look into it at some point; I’ll be sure to let ya know
Another frickin’ EPIC article Murray! I like the action at the end…. I usually start a new notebook in OneNote (Microsoft Office product)and start my research, I include keyword research, social, competition, domains, all inserted in txt, excel, webpages… anyway you want to insert them, makes compiling everything really easy for analyzing.
Thanks Keith, glad ya liked it – hopefully it’s not too lengthy but it’s hard to convey a lot of these ideas in a 1,000 word post, ya know?
That’s a great way to do things Keith. Lately, I’ve been working on getting the structure down (as you do) for my ventures rather than even looking at the milestones. I look at the BIG picture right down to how I want the pages to lay out, content strategy, who I’ll need to interact with and more.
Doing your homework prior to doing the work is a lot of hassle but it definitely keeps you focused rather than obsessively creating content and hoping for the best like most bloggers do. That’s why I wanted to make sure that this topic was really pushed first and foremost in the series. This is where the backbone is.
Anyway, glad you could add some input. Lemme know if you are going to work on any new ventures throughout the series because it would be great to see how it progresses in time.
EPIC indeed…
Loved “Method 4: Use feedback from your community” i think that most of the time by interaction you learn much more… not an easy task to build a guide for successful online business…
look forward to the next one…
Thanks,
Sharel
sharel´s last [type] ..What communit users are saying about us
Glad you enjoyed that one Sharel
Gaining user feedback is the easiest way to get right to the issue that you need to solve. No guessing. No research. You’re being told, directly, what needs to be done which is really awesome.
Of course, you have to build up a bit of a following before hand but since a lot of this series applies to bloggers that want to expand into business – they already have that community.
I think, personally, that a lot of bloggers and web users don’t want to ask their community because it will come off, in some ways, as being sort of “hey, I want your money – tell me what you want” but you can’t really know their reaction until you get their response. If it’s a bad idea, people will tell you. If it’s good, they’ll be all on board for it.
The series is going to be quite difficult to put together since there’s simply so much to online business. I’m hoping that community members, such as yourself, can add a ton of feedback to each post so that I can be sure to include items I may have omitted throughout the process either in the next post or in the follow up posts that I intend to dig deeper into individual topics.
The goal, overall, is to keep everything neatly organized so it gives everyone a logical progression in developing their business. Some things may not apply to your own at the moment but I certainly plan to get to the more advanced topics in due time. My goal is to make this as a foundation, of some sorts, where I can reference this time and time again when need be.
Anyway, I appreciate your support Sharel. Glad to have you on board with this series; I think you’re going to learn a lot of things that can be applied to your venture whether it’s starting a new one or gaining the “eyeballs” to an existing venture. Either way, it’s support form members like you that makes it all the worthwhile.
Hi Murray,
I love your idea of a dry sales run; just getting people to the checkout page and then disabling things to avoid a hassle. Just to see what happens.
I’m sure there are places that could show me how to do that. Not that I’m anywhere near even that much, but still. It’s a really great idea to take with me.
And I love the concept of understanding the platform of building a business rather than just trying to mimic someone else. That has shown to be a real disaster, especially with the online marketing groups. In the beginning, it was easy with Google to put up ads selling your “opportunity,” and it worked for them. But Google (and Craigslist, and Yahoo, and everyone else) has gotten wise to those and will knock those down as spam faster than you can say, “Holy @#*!, I just got slapped.”
But you’re replicating their work…and it just doesn’t work anymore. The message that you get sent home with is that you’re not working hard enough, not putting enough into it, just not “serious” enough, when really you’re trying to duplicate a process that doesn’t work anymore rather than understanding the organic process to begin with.
I love it!
Delena
Delena Silverfox´s last [type] ..epc Belfast
Nice Murray!
I realize you’re probably on an airplane as I write this and I don’t know when you’ll read it, but I’m commenting anyway.
I confess I’m not the best at doing all my homework before I create, but I’m getting better. I like your 3 questions to ask:
Are there really buyers out there for this?
What are they willing to pay?
Is my information evergreen?
I think sometimes people get hung up thinking they don’t know enough about anything to create a business around it. They don’t realize just how much they know… and that it’s more than others know.
Thanks for laying it out and giving people actionable steps to take.
Peggy
Peggy Baron´s last [type] ..My Forum Commenting Challenge – Pass or Fail
Hi Murray,
AWESOME points, and I couldn’t agree more – with any endeavor that you start, no matter the kind, you should always ask yourself why you’re doing what you do before going any further. What do you want the end result to be? How will this help improve your life? What’s going to change after completing this task or taking part in this business venture?
Then, once you answer the why, you can get into the how. How will this project or business work, and what is required to make it work?
These are all GREAT tips, and I’ll be slowly going through them all one-by-one when processing my own business ideas. AWESOME guide, and this deserves a tweet and bookmark from me.
Christina
Christina Crowe´s last [type] ..Are All Marketers Evil Why Building Links Can Save Your Business
“Run a short “dry” launch – Skip the tedious amounts of research by putting a product out there even if it isn’t finished. See how many people click through your offer and get to the sales page (even the checkout page). Shut down the sale before anything is completed to avoid hassles. You’ll learn that people are ready and eager to buy – viola!”
This seems like it might upset a large number of people who are willing to buy. If I clicked all the way through to the checkout and then it was pulled out from under me, I would have a bad taste in my mouth for the product.
Am I seeing this wrong? Is there any way you can clarify Murray?
Thanks for your help. This is a great post. Creating a notebook in EverNote right now!
Sal´s last [type] ..Open Thread- On Trusting
Hi Sal,
I agree it sounds counter intuitive, but I have heard several marketers recommend this.
First, potential customers will likely blame the technology rather than suspect you have constructed an elaborate ruse to test their interest.
Second, if you do this early enough in the process, you aren’t connecting with enough of your audience to need to be concerned about the negative opinion. As soon as you have the information you need as a marketer, you’ll stop drawing others into your construct until the final product is ready. If anything, someone who was thwarted in an attempt to buy your dummy product may be thrilled to come back a few weeks later and find that you figured out your technical problems and now your shopping cart works fine.
Of course, the next time you’re buying an awesome info product and the sale refuses to go through, you will have your suspicions.
Tammi
Sal,
I highly recommend running a short dry run.
Sometime ago, I tried to venture into selling t shirts online. I posted it and got some replies.
The thing is if you’ve got a large (I mean LARGE)number of people that is wanting your product and is very willing to pay,then you can give it a shot and fix the product and sell it to them.
For my case I did not release the shirts. One reason is that “some” replies won’t cut the cost of production. I also learned some ways on where and how to offer products.
It surely is a great way.
Marco Lee´s last [type] ..The Five Characteristics that You Should Have
If you love what you do; you’re not going to have trouble doing it over and over again. – I definitely agree on this.
I’ve made a new (“project” or “business”)called beyond pick up (http://BeyondPickUp.net) that focuses on pick up arts and lifestyle design.
From it I learned to somehow narrow more the niche. I could just focus that site in Pick up arts and get more from the community.
This also makes it easier for me regarding content as pick up is something I’m really good at and making content about it would just be a breeze.
I can see the market with what I am focusing. Still there also other factors such as the geolocation of the market; would I learn and receive more from the local market or from the international ones. From this I would also know which products to focus on; face to face coaching or ebooks and dvd products etc.
Marco Lee´s last [type] ..Mini Vacation Ideas – Plus a Rundown of Must See Places in Manila
Great post Murray. I wish I started an online business earlier but it’s never too late. I want to be able to do whatever I want and whenever I want! Having an online business would help me on that!
Fazal @ Make Money Online´s last [type] ..5 WordPress Plugins That Will Make Your Blog Load Faster
Murray,
This is action-packed, my friend. I like how you called out specific actions for us to take.
If this is an indication of the depth of things to come we should all keep a close eye on what you have slated for us.
Thanks!
Jon
Jon´s last [type] ..Where You’ll Find Answers to those Burning Business Questions
Hey Murray,
I’m a fan. I’ve read several of your comments, and they are always STRONG.
I like the idea of ‘buyer’s market’. If you get into something with the intent of making money, you must be sure there are buyers. If not, you will have to create buyers by tweaking. It’s easier to be prepared for rain than to take cover during a storm.
Thanks.
Live it LOUD!
Very good and informative post! It remind me why I started blogging! Starting an online business though it’s not easier than any other common business. For both it needs persistence and hard work to make it successful. It’s what you said about loving what you’re writing about. This makes it a bit unique because there is a variety of topics you could start writing for. That’s giving you motivation, inspiration, energy and passion to work on something you love and succeed! Thanks for sharing..
John
John Mak´s last [type] ..My Personal GoToMyPC Review for iPad Users